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Fair Wind Sailing, Inc. v. Dempster

United States Court of Appeals for the Third Circuit

May 13, 2014, Argued; September 4, 2014, Filed

Nos. 13-3305 & 14-1572

Opinion

OPINION

(September 4, 2014)

 [*305]  [****1341]    Fuentes, Circuit Judge

Fair Wind Sailing, Inc. brought this action against Virgin Island Sailing School (“VISS”) and its co-founder Scott Dempster, alleging, in relevant part, that Defendants infringed upon Fair Wind's “trade dress” in violation of the Lanham Act, 15 U.S.C. § 1051 et seq., and unjustly enriched themselves by copying Fair Wind's business. The District Court dismissed Fair Wind's trade dress and unjust enrichment claims, and subsequently awarded Defendants fees under Virgin Islands law. Fair Wind challenges both the dismissal of its claims and the award of attorneys' fees.

The District Court properly concluded that Fair Wind failed to state claims for trade dress infringement and unjust enrichment. As to the former claim, Fair Wind has failed [**2]  to adequately explain what “dress” it seeks to protect, and its trade dress, as pleaded, is functional in nature. As to the latter claim, Fair Wind has not pleaded with sufficient particularity in what manner Defendants have been unjustly enriched. We therefore affirm the dismissal of both claims.

However, we agree with Fair Wind that the District Court improperly awarded fees for the entirety of the litigation under  [*306]  Virgin Islands law. While it would have been appropriate for the District Court to award reasonable fees accrued defending the territorial law claims, an award for the portion of the fees accrued defending the Lanham Act claim was appropriate only to the extent that this was an “exceptional”  [****1342]  case. 15 U.S.C. § 1117(a). The District Court did not decide whether this case was an “exceptional” one. We therefore remand the fee dispute for further proceedings. In the wake of new Supreme Court precedent, we take this [***802]  opportunity to amend our recently-abrogated jurisprudence on the standard for finding “exceptionality” under § 35(a) of the Lanham Act.

The complaint alleges the following facts, which we assume to be true and construe in the light most favorable to the plaintiff. See Ashcroft v. Iqbal, 556 U.S. 662, 678-80, 129 S. Ct. 1937, 173 L. Ed. 2d 868 (2009).

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764 F.3d 303 *; 2014 U.S. App. LEXIS 17118 **; 61 V.I. 797 ***; 112 U.S.P.Q.2D (BNA) 1340 ****; 2015 AMC 585

FAIR WIND SAILING, INC., Appellant v. H. SCOTT DEMPSTER, Individually and Doing Business as VIRGIN ISLANDS SAILING SCHOOL and VIRGIN ISLANDS SAILING SCHOOL

Subsequent History: On remand at, Costs and fees proceeding at Fair Wind Sailing, Inc. v. Dempster, 2016 U.S. Dist. LEXIS 195357 (D.V.I., Mar. 16, 2016)

Prior History:  [**1] On Appeal from the District Court of the Virgin Islands. (D.C. No. 11-cv-00055). District Judge: Honorable Curtis V. Gómez.

Fair Wind Sailing, Inc. v. Dempster, 2014 U.S. Dist. LEXIS 28585 (D.V.I., Mar. 6, 2014)Fair Wind Sailing, Inc. v. Dempster, 2013 U.S. Dist. LEXIS 36072 (D.V.I., Mar. 15, 2013)

CORE TERMS

trade dress, district court, Lanham Act, unjust enrichment, attorney's fees, defending, infringement, award fees, enriched, Sailing, website, territorial, curriculum, federal claim, allegations, catamaran, consumers, features, visual, dress, fee award, litigating, culpable, entirety, inextricably intertwined, exceptional case, prevailing party, losing party, nonfunctional, teaching

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Antitrust & Trade Law, Consumer Protection, False Advertising, Lanham Act, Trademark Law, Federal Unfair Competition Law, Lanham Act, General Overview, Contracts Law, Remedies, Equitable Relief, Quantum Meruit, Pleadings, Complaints, Requirements for Complaint, Appeals, Standards of Review, Abuse of Discretion, De Novo Review, Costs & Attorney Fees, Attorney Fees & Expenses, Reasonable Fees, Basis of Recovery, Statutory Awards, Business & Corporate Compliance, Remedies, Patent Law, Damages, Collateral Assessments, Attorney Fees, Governments, Legislation, Interpretation

Civil Procedure, Defenses, Demurrers & Objections, Motions to Dismiss, Failure to State Claim, Antitrust & Trade Law, Consumer Protection, False Advertising, Lanham Act, Trademark Law, Federal Unfair Competition Law, Lanham Act, General Overview, Contracts Law, Remedies, Equitable Relief, Quantum Meruit, Pleadings, Complaints, Requirements for Complaint, Appeals, Standards of Review, Abuse of Discretion, De Novo Review, Costs & Attorney Fees, Attorney Fees & Expenses, Reasonable Fees, Basis of Recovery, Statutory Awards, Business & Corporate Compliance, Remedies, Patent Law, Damages, Collateral Assessments, Attorney Fees, Governments, Legislation, Interpretation